Product Vs. Production Concept
Product and production concepts are two marketing philosophies that talk about the idea of producing products, selling, and generating profits. While these marketing philosophies might sometime be used interchangeably, they hold a great difference between them.
On the one hand, the product concept of marketing refers to the philosophy that believes consumers opt for quality products instead of lower-priced products.
On the other hand, the production concept of marketing refers to the philosophy that believes consumers choose lower or affordable-priced products.
Let’s further dive into what the production and product concepts are, and the differences and similarities between them.
What is Production Concept?
The production concept of marketing is the earliest – might not be a mistake if it is said – the first marketing concept i.e. philosophy that assumes price factor is the key variable in marketing. It argues that consumers choose products that have lower and more affordable prices set.
It centers its idea on creating products as much as possible through mass production, achieving production efficiency, and economies of scale, and making the products available everywhere within reasonable cost.
Related: Pros and Cons of Production Concept
What the production concept tells us is that the oversupply of the products themselves creates their demands. As such, it stands in favor of Say’s Law “Supply Creates Its Own Demand”.
What is Product Concept?
The product concept of marketing is the second after the production concept. It is a philosophy that believes product quality is the key factor in promoting the products.
It argues that people choose quality over quantity i.e. price. It believes all consumers are quality conscious. And, forces businesses to produce products that are of the highest quality, have high performance, and durability.
Related: Pros and Cons of Product Concept
Difference Between Product and Production Concept
Now, let’s differentiate between the product and production concepts of marketing.
Consumer Preferences
- Product Concept: This concept centers around the belief that consumers gravitate toward products that offer superior quality, enhanced performance, and unique features.
- Production Concept: Contrarily, the production concept posits that customers are more inclined to choose products that are easily accessible and budget-friendly.
Focus and Objective
- Product Concept: Companies that adopt the product concept prioritize quality, continually improving product attributes to meet customer expectations.
- Production Concept: The production concept shifts focus towards achieving economies of scale, streamlining production processes, and reducing costs.
Read Also: The 4 Cs of Marketing
Marketing Variables
- Product Concept: Quality becomes the primary marketing variable, as the focus remains on creating products that resonate with customers through their excellence.
- Production Concept: In this scenario, the marketing variable is the product’s price, aiming to cater to cost-conscious consumers.
Business Strategy
- Product Concept: Embracing the product concept drives companies to deliver exceptional value by emphasizing quality, performance, and innovative characteristics.
- Production Concept: With the production concept, the primary strategy is geared towards mass production and widespread availability, often at a lower cost.
Customer-Centric vs Efficiency-Centric
- Product Concept: This approach is customer-centric, revolving around the idea of exceeding customer expectations through the provision of outstanding products.
- Production Concept: On the other hand, the production concept places more importance on the efficiency of production and cost-saving measures.
Read Also: 3 Ps of Marketing Mix
Ultimate Goal
- Product Concept: The ultimate aim of the product concept is to create products that stand out in the market and meet customer demands effectively.
- Production Concept: In contrast, the production concept’s goal is to increase the quantity of production while keeping costs low.
Profit Generation
- Product Concept: Profits are generated by offering high-quality products that customers are willing to pay a premium for.
- Production Concept: Profits result from the large-scale production of products, capitalizing on cost efficiency.
Innovation and Improvement
- Product Concept: Companies following the product concept continuously innovate and improve product features to stay ahead in the market.
- Production Concept: The production concept is less concerned with constant innovation and more focused on optimizing production processes.
Competitive Advantage
- Product Concept: Embracing this concept can provide a competitive edge by offering superior products that meet or exceed customer expectations.
- Production Concept: A competitive advantage can be achieved through efficient production processes, resulting in cost savings that can be passed on to customers.
Market Perception
- Product Concept: Companies adopting the product concept build a strong market perception based on quality, performance, and unique features.
- Production Concept: The market perception under the production concept is centered around affordability and accessibility.
Example
- Product Concept: Apple, Gucci, Sony, and Mercedes-Bez are the notable companies that are applying this marketing concept.
- Production Concept: China’s manufacturing sectors and India’s IT sectors are prime examples of this marketing concept that is still relevant.
Read Also: The 4 Ps of Marketing Mix
Similarities Between Product and Production Concept of Marketing
Both the product and production concepts in marketing revolve around strategies aimed at achieving success in the business world. While they possess distinct focuses, they also share fundamental similarities. Let’s delve into the similarities between these two approaches:
Customer-Centered Approach
Despite their disparities, both concepts place a major emphasis on catering to customer needs. In the product concept, the spotlight shines on delivering products of exceptional quality and innovation that align with customer preferences. Similarly, the production concept strives to deliver products that are economical and readily accessible to fulfill the demands of customers.
Business Profitability
Both concepts inherently aim to augment a company’s profitability. The product concept achieves this by crafting products that command a premium due to their superior quality and distinctive features. On the flip side, the production concept aims to trim costs through streamlined processes, culminating in heightened profits that can be transmitted to customers through lowered prices.
Customer Satisfaction
The pursuit of customer happiness is a shared objective. In the product concept, companies endeavor to satisfy customers by presenting products that excel in both quality and performance. In parallel, the production concept ensures customer satisfaction by presenting products that are effortlessly within reach and budget-friendly.
Balancing Act
Both concepts necessitate adeptly managing a delicate balance among various factors. In the product concept, companies must harmonize product quality, innovation, and marketing endeavors to create an enticing proposition. Similarly, the production concept calls for an equilibrium between cost-effectiveness, scalability, and meeting customer anticipations.
Strategic Decision-Making
Effective implementation of either concept depends upon thoughtful strategic decision-making. In the product concept, companies navigate decisions related to enriching features, quality, and benefits to stand out in the market. Meanwhile, in the production concept, choices revolve around optimizing production processes and capitalizing on economies of scale to present budget-friendly products.
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